A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

Search form

Tag: PAYGO rules

One could argue that exempting ObamaCare from the PAYGO requirement is appropriate given the defects in current budget rules.

By law, the CBO must follow certain rules when doing cost estimates of legislation and projecting federal spending under current law. Under those rules, CBO projects ObamaCare will reduce the deficit. No question.

But Congress often defeats those budget rules by passing legislation with “pay fors” (i.e., spending cuts) that make the budget look better, yet are highly unlikely to be sustained because they are politically implausible. A good example of this is the “sustainable growth rate” formula, where Congress promises to ratchet down the government price controls that Medicare uses to pay physicians in future years. Congress has consistently reneged when those cuts come due. The pretense of future cuts that Congress writes into law makes 10-year budget projections/deficits look better than actual, unwritten policy would suggest.

This is a recognized problem. When the CBO believes that the law and actual policy are at variance, they actually do two types of cost projections: one based on the law as written and one based on the policy they think Congress is likely to adopt, based on past performance. They call the latter their “alternate fiscal scenario.”

ObamaCare opponents submit that this law is one of those instances where law and policy are at variance. So even though ObamaCare will reduce the deficit under existing budget rules, the spending cuts (actually, reductions in future spending growth) in the law were never going to take effect anyway. The CBO, CMS, and even the IMF have all discredited the idea that ObamaCare would reduce the deficit, because they all question the sustainability of ObamaCare’s spending “cuts.” Exempting ObamaCare repeal from PAYGO rules is appropriate if those rules have failed to protect taxpayers.